business essay

Analysis Of The Key Entrepreneurial Traits Business Essay

Published: 23, March 2015

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Roberts found that 39% of a sample of entrepreneurs cited independence as a reason for starting their businesses, 30% were responding to a challenge, while only 12% were motivated by wealth (Roberts 1991). Carland et al further describe motivations underlying entrepreneurial drive, as need for autonomy, need for challenges and self-actualization, and a desire for control or growth (Carland, Carland et al. 1995). In Richard's early years, limited financial rewards were available to him via conventional jobs to fund the self-sufficient lifestyle he craved. His desire for independence, described by Wickham as one of the push factors for becoming an entrepreneur (Wickham 2001), dictated his decision to start his business.

Motivation and drive of entrepreneurs characterises their difference from the mainstream. 'Entrepreneurial effort' encompasses a variety of characteristics, such as determination, commitment, zeal, persistence, opportunity and focus, which are exhibited by the entrepreneur (Collinson and Shaw 2000). Richard displays all of these through his clear vision, drive, hard work and a determination not to fail or be beaten, despite the huge set-back experienced when his first business enterprise failed. He had major commitments when initiating PostaWest and faced significant obstacles, apathy and opposition in progressing his product. However, he knew intuitively he had a winning creation.

Age and educational attainment is another common area for entrepreneurs. Most start their businesses in their late teens or early twenties and do not go beyond secondary education (Bolton and Thompson 2005). Richard did not go to university and was not a high academic achiever. In common with many entrepreneurs he started a small business in his teenage years. He bought potatoes direct from a local farm, bagged them up and sold them to housewives from his bicycle. His first 'proper' business, 'Malt', was started whilst in his early twenties, but sadly failed.

Having a failed business under his belt, many would seek the safety of 'regular' employment, but Richard embarked on a second business, PostaWest. In addition, he later launched PostaWeb1, plus an advertising company in Spain1 and a newspaper vending company in Teneriffe2. Many entrepreneurs will set up a new company when one fails; often termed serial entrepreneurialism (Nystrom and Starbuck 1981).

Entrepreneurs are thought to differ from the rest of the manager population as regards their risk-taking propensity (Carland, Carland et al. 1996). There have been many studies of this particular trait. One approach has been to try to understand the entrepreneur's perception of risk and whether it differs from the general population (Gilmore, Carson et al. 2004). It was found that entrepreneurs tend to view situations more optimistically than the mainstream, with a strong belief in themselves. They consider the environment to hold more opportunities than threats and are more optimistic about the future (Palich and Bagby 1995). This enables them to participate in activities others may perceive as too risky, rather than being overt risk-takers. It could also explain Richard's willingness to embark upon another business venture immediately following the failure of his first business.

According to Collinson et al, the entrepreneurial scenario is typified by the seeming level of risk facing the person or organisation, the available resources and the person's need for skills, knowledge, experience and personal independence (Collinson and Shaw 2000). We have examined Richard's level of risk-taking and his need for personal independence, and now we explore his approach to acquiring skills, knowledge and experience.

Product, Skills and Knowledge

Richard developed a detailed knowledge of his sector through employment in a large existing organisation. This aligns with research indicating that 90% of entrepreneurs start their businesses in the same market or industry as they were working in (Bolton and Thompson 2005). Experience is also frequently gained from starting a number of businesses over time which either do not grow, or fail.

I believe the lesson learnt by Richard regarding the failure of 'Malt', which grew too quickly for its infrastructure, led him to be cautious in the expansion and funding of PostaWest. The development of his product was funded from in house revenue initially, but with hindsight Richard feels he should have sought external finance earlier in the development. Learning has been a key factor for him. He has expanded his personal knowledge considerably over time and through practical experience; learning about his market, the specific problems, the resulting product and the broader aspects of running a successful business.

PostaWeb was developed from Richard's expertise and detailed insight of a particular problem. Product development was in parallel with "normal" business operations, assisting the development process through learning. Richard developed a key and unique technology, which cannot be copied easily, due to the imbedded experience and expertise of the development process.

Innovation is a central task for the entrepreneur-manager (Drucker 1985). Schumpeter talks of the 'entrepreneurial' function as distinct from the 'managerial' function, which must be found in one individual, but only shows up within the process of innovation (Schumpeter 1928).

Fig. 1 details types of entrepreneurial innovation according to Wickham. PostaWeb is a specialist niche product, derived from specific industry knowledge and designed to solve a particular problem with a low level of impact to the wider market.

According to Hisrich, the uniqueness, or originality of entrepreneurial innovation falls into four basic types; Finders, Grinders, Minders and Binders. These represent a range from completely new and innovative, to newly applied replication of existing products, services and processes (Hisrich 1986). The level of originality of innovation applied by Richard to all of his ventures is in the Binder category. Entrepreneurs rarely change their fundamental type or attempt to work in more than one area of functional innovation (Hisrich 1986).

Maintaining personal control of the business and reluctance to delegate responsibilities are key characteristics of the small business entrepreneur (Begley and Boyd 1987). It took the demands of PostaWeb to persuade Richard that it was necessary to employ a qualified manager to run PostaWest. Richard and his wife Maggie, however, retain their informal approach for PostaWeb, based on intuition and their close personal relationship. Richard has learned and understood the benefits of having access to good professionals; employing first-class people to assist run his core businesses, and seeking specific advice when necessary.

Richard highlights the benefits of leverage through contacts in his industry and hence the need to develop and maintain them. There has been much written about the role of networking as a key skill in entrepreneurial activities. Contacts frequently complement and expand their resources (Aldrich and Zimmer 1986; Burt 1992), which is particularly important in small businesses. Networking also shortens the path to knowledgeable others to get what it needed (Granovetter 1973; Blau 1977; Burt 1992). For instance, a friend of a friend was employed by PotaWest to assist in the development of the software for PostaWeb, whilst a contact in Teneriffe provided country specific knowledge for advertising in Spain.

Research of strategy making in entrepreneurial firms have found that entrepreneurs tend to employ little formal planning, ostensibly relying on 'muddling through' to achieve change (Behara and Gundersen 1995) and are strategically opportunistic (Mintzberg and Waters 1982). Richard said to me, 'I wander through life and bump into opportunities, but Maggie thinks we work hard at it and I suppose we do work hard, but it is luck'. This is an interesting comment from him because it is contrary to common assertions from entrepreneurs. Often acknowledging circumstances have combined to give them opportunities, together with luck, entrepreneurs believe they are the ones who have seized the opportunity and made it happen (Bolton and Thompson 2005). Richard's comment may have been modesty, or that he takes his ability for granted and does not recognise his entrepreneurial role in the success of the company.

Conclusion

Richard Pryce fits the established notion of an entrepreneur through his founding of a new business, PostaWest, and his further innovation within that business sector via the development and delivery of PostaWeb and other ventures.

It is evident that the key competencies associated with entrepreneurial management and activities are wholly intangible and supported by a high level of perception and intuition, combined with lateral and forward thinking (Drucker 1973), with innovation at the heart of entrepreneurial activity. What I find interesting is that Richard does not recognise he has entrepreneurial competencies, yet to me the traits are so obviously there.

What makes an entrepreneur different from a leader/manager, is his or her ability to build something rather than purely influence people. An entrepreneur combines both these skills, which Richard successfully does.

Annex A

Critical History - PostaWest

On leaving school with an ambition of becoming an architect, Richard spent 3 years training to be a quantity surveyor, before moving into market research and advertising with Mills & Allen, the largest outdoor advertising company in Britain and Ireland.

He had a desire to become totally self-sufficient, but realised that he needed to generate more income than an employee salary to afford an adequate piece of land in the South of England, which also enabled his wife to continue working in London. He and a partner established "Malt", an advertising business in London, which was successful, growing to a turnover of £250,000 within 3 years. It failed when it could not support the necessary national coverage with the affordable infrastructure. Malt's business was taken by one of its former customers, which had national coverage, integrating vertically by buying a service company. Richard took the remaining Malt contracts in the South West, establishing himself in Bristol. His new business PostaWest, run in partnership with his wife Maggie, survived and grew, becoming profitable when it passed the 10 employee level. In 2003, PostaWest employed 40 and serviced 6,000 sites each month.

Bill posting is at the lower end of the "food chain" in advertising terms. Companies commission marketing campaigns through specialist agents, which employ regional agents, which employ billposting companies such as PostaWest. The multiple interfaces from commissioner to practitioner facilitate "errors", so that a commissioner may not receive the full range of posters for which it paid. Accountability through proof of posting is a key issue in the industry, with commissioners seeking accountability, billposters being blamed and fined for not being able to provide proof of posting, and the many middle men benefiting from the lack of clear accountability. There had been a number of attempts to introduce accountability systems but, at the time, all had failed, usually on practicality issues. One example employed bar coding but this had several shortcomings, which undermined its use as proof of posting.

PostaWest developed a PC DOS based programme to assist it to manage its commissions and billposting, providing a clear audit trail from commissions to worksheets for the posting and keeping the customer informed with what had and, as importantly, what had not been received. It developed a scheme using Instamatic cameras to provide photographic evidence of posting, with local landmarks included in the picture to assist identify each poster site. Managing the photographs was a major activity. Upgrading the DOS programme to Windows and moving to digital photography provided an opportunity to move to an intranet based system.

However, a bottleneck occurred at the end of each day as the various regional sites uploaded their pictures. This spawned the concept of PostaWeb as PostaWest moved to an Internet based system, enabling the images to be uploaded and accessed at any time. While simply summarised, the process required considerable effort and refinement, through trial and error to ensure that the billposters produced adequate pictures as records and the images were useable on the website.

Having established the Web-based record to provide proof of posting, PostaWest realised that the system itself was marketable, providing others in the industry with the same proof of posting. However, vested interests resulted in a negative reaction up the advertising "food chain", until the commissioning authorities were reached. This occurred mainly by luck, with the Incorporated Society of British Advertisers reacting to an article in a Scottish journal promoting the benefits of PostaWeb, based on literature provided by PostaWest, but without any associated discussion or dialogue. This resulted in a contract in January 2001 to provide PostaWeb for 2 years exclusively to More O'Ferrell in the UK, and to J C Decaux for European use.

Process Model for PostaWest

Annex B

Annex C

Bringing together Cabitelle and Telefonica

12.8 million U.K. residents went to Spain in 2000

78% had been to Spain before

61% planned to return

95% arrived by air

The average duration of UK residents stay in Spain was 10 days

51% of holidays already booked for Summer 2001 are to Spanish destinations

Visitors from the U.K. represented 26% of all tourists to Spain in 2000

Spanish government figures predict that tourism to Spain will continue to increase by at least 5% annually for the forthcoming years

A special characteristic of the British market is its loyalty throughout the 12 months of the year and not only during the summer season

Source: Estudios Turisticos Madrid

In every location where there are people:

in town squares

at the beach

outside pubs, clubs, shops

in universities

at hotel/apartment complexes

by taxi ranks/airports/seaports

at all major tourist attractions/venues

enabling campaigns to be tightly targeted with little

media wastage

Measurements of Poster display area: 248 cm x 46 cm

Fully illuminated

Fantastic availability

Postawest has a fully staffed office in Tenerife with bi-lingual employees With extensive knowledge of advertising throughout Spain.

One stop booking. With a call to either our offices in the U.K. of Tenerife we canquickly create bespoke packages for you with detailed site identification from our Telefonica database;

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